Is it time for “doom and gloom”? – Offchain Labs has announced the launch of Arbitrum One, the mainnet for itsEthereum Second Layer(ETH) scaling solution. It has also just raised $120 million, which allowed it to become a crypto unicorn.
Fresh money and live mainnet for Arbitrum
Offchain Labs has justannounced the launch of its Arbitrum One mainnet and is raising $120 million through a Series B funding round led by Lightspeed Venture Partners. Lightspeed co-founder Ravi Mhatre has joined the Offchain Labs board of directors as part of the deal. The fundraising saw participation from Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, Alameda Research and Mark Cuban.
Recall that Offchain Labs is a New York-based company developing Arbitrum, a second-layer scaling solution for Ethereum. The latter would allow for many more transactions to be processed at lower costs on Ethereum. Arbitrum processes transactions on a sidechain that uses Optimistic Rollups technology. It then records them in batches on Ethereum’s main network.
Projects that use Optimistic Rollups for their second-layer networks must verify the validity of their transactions and then publish the data from the latter to Ethereum. If these projects intentionally or unintentionally accept an invalid transaction, the transaction can be challenged by any Ethereum user.
Arbitrum and Optimism, which are both Ethereum scaling solutions, use Optimistic Rollups. However, their anti-fraud logic is different.
Optimism limits the size of smart contracts to what can be executed back on Ethereum. Arbitrum allows users to split smart contracts into different parts and prove fraud at the level of a single contract instruction.
A new unicorn in the cryptosphere: focus on engineering
According to Offchain Labs co-founder Steven Goldfeder, the launch of Arbitrum One will now allow the public to interact with decentralized applications on Arbitrum, whereas only developers were able to test and launch their applications on Arbitrum before.
Arbitrum is the first scalability solution developed by Offchain Labs, but the company is also working on other similar projects. The $120 million in new funding will allow the company to acquire the resources and make the investments necessary for its development, according to Goldfeder:
“We will use the newly raised capital to expand our team and continue to invest heavily in R&D.”
Offchain Labs currently has a team of 14 people. The majority of future hires are expected to be in engineering, although the company is recruiting in all areas. In addition, this funding round makes Offchain Labs a new unicorn in the cryptosphere valued at $1.2 billion. The company’s total funding currently stands at $124 million – in seed, Series A and Series B.
Second-layer scalability solutions are needed at the moment for an Ethereum that still can’t solve the problems of high gas fees, despite the latest London upgrade. Let’s hope this situation doesn’t last too long!
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